Allen: Offshore drilling will never be ‘risk-free’

Retired Coast Guard Adm. Thad Allen, the public face of the Obama administration’s response to last year’s Gulf of Mexico oil spill, said policymakers will never be able to completely reduce the risk of another major drilling accident.
 
“There’s no such thing as risk-free drilling,” Allen said in an interview with The Hill on Tuesday, one year after the spill. “The question is, what level of risk is acceptable?”
 

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Allen said the United States has made a great deal of progress on offshore drilling safety. The Interior Department, for example, has issued a series of heightened safety standards.
 
But Allen said there’s still more work to be done, including passing legislation to address issues related to spill liability and agency oversight.
 
“I think the issue is, what constitutes an adequate safety and risk-management regime?” Allen said. “Where that line is at — I don’t think there’s been a clear line drawn.”
 
Reflecting on his tenure as the national incident commander during the spill, Allen said he would have done a few things differently. For instance, he would have established uniform safety and operational standards for the Vessels of Opportunity program, which put fishermen and their boats to work cleaning up the oil that spewed into the Gulf.
 
“I think you need to have a set of operational procedures on how you’re going to do it,” said Allen, who became a senior fellow at the RAND Corp. in October 2010, where he focuses on national-security and environmental issues. “We were kind of making it up on the fly.”
 
Allen also said he would have taken control of the airspace over the Gulf immediately after the Macondo well blowout and resulting explosion on the Deepwater Horizon oil rig, which killed 11 workers.
 
“If I was doing the spill over again I would have done it on Day One,” Allen said, noting that there were “a couple of near-collisions” in the Gulf amid the chaos of the initial response to the spill.
 
Going forward, Allen said, it’s time Congress passes legislation to address some of the key shortfalls unearthed by the spill. While the House passed oil-spill response legislation last year, the Senate has been unable to move a similar bill and the issue has largely fallen off lawmakers’ priority list.
 
The legislation should, for example, require that the Coast Guard review all oil-spill response plans, as well as address the vexing question of spill liability, or what proportion of damages a company is responsible for.

Under current law, oil-spill liability is capped at $75 million. “Capping their liability at $75 million is not good public policy,” Allen said.
 
But Allen, like many policymakers, warned that new liability provisions must be developed carefully, noting that unlimited liability could put major burdens on small- and medium-sized operators in the Gulf.
 
Instead, Allen advocated for a mutual insurance approach whereby companies pay into an insurance pool that would partly cover a responsible party in the event of a major spill.
 
Looking back on BP’s response to the spill, Allen gave the company “high marks” for its engineering efforts to cap the well.
 
But BP fell down on the job when it was dealing with the claims process that resulted from the spill, Allen said. The claims process has since been taken over by an official appointed by President Obama.
 
Allen also gave BP low marks for its interactions with oil-spill victims in the months after the spill.
 
“That was a challenge for them,” Allen said.